A Stainless Steal — How Do You Say “Caveat Emptor” in Chinese?

August 9, 2017

While not quite as culturally synonymous with beer as hops are—and certainly not as hip or exciting or prone to inspiring conversation—stainless steel is more pervasive in brewing than it might seem at first glance. Of course, the brewstand and fermenters are made of it, but so is the majority of the plumbing between the tanks, the fittings, the filters, the valves. That doesn’t even take into account the stainless involved in canning and bottling lines, in the kegs and casks, and even the taps and dispensers at the consumer end of the line. Anything that directly touches the beer needs to be food-grade stainless steel, otherwise it risks contamination and off-flavors.

In the brewhouse it’s not raw and utilitarian, but polished and purpose-built. It’s as much art as practical brewing apparatus. Despite every brewery using the same basic parts, the layout of the mashtuns and kettles and fermenters creates an aesthetic unique to each space. Troegs Brewing Co. in Hershey, PA puts their kettles behind the main bar, in full sight of customers, as if to make them feel like they’re part of the process. Budweiser’s massive 6000-barrel tanks in St. Louis loom in austere rows, like man-made mountains. From micro to macro, there’s a subconscious beauty in how breweries choose to place, position, and align their stainless elements.

As more than 5,400 breweries in the U.S. churn out beer daily, with just as many poised to join them over the next few years, the demand for stainless steel is increasing dramatically. While some breweries opt to buy used kettles and tanks, the market for such equipment is quickly drying up, opening up the door for competition, both domestically and internationally.

While real estate, taxes, and other start-up costs can seem daunting, the single biggest expense most new breweries face is in their stainless. It’s no surprise, then, that many new brewers will review as many options as they can to stretch their start-up capital to its fullest potential. That includes looking at much cheaper stainless produced in the global capital of cheap goods: China.

It’s important to note, before going any further, that the phrase “Made in China” doesn’t automatically mean “shitty quality.” While cheaper in price than a lot of regions, there are plenty of products being made in China that are acceptable to very good. Eastman Guitars, for example, are hand-carved and made by luthiers near Beijing—and played by big-name musicians like Jimmy Buffet.

The same goes for brewing steel. Reputable dealers are selling decent-quality steel at fractions of the prices of their American and European competitors. But when Chinese steel goes wrong, it goes spectacularly wrong. A doubling of the U.S. brewing industry could mean an influx of cheap, corners-cut steel, and potentially, an entire bevy of unforeseen consequences for individual breweries and the industry as a whole.

Penglai Jinfu, a Chinese producer of kegs based in the Shandong province in China, has gone from producing a mere 400 kegs per month in 2004, to more than 60,000 kegs a month in 2016—with projections of more than 80,000 by 2018. Given the size of their partners (AB InBev, SAB Miller, DAM, Snow, and many other very large brands), it’s no surprise they’re growing so fast. When talking that scale of volume, saving around 30% on the cost of each keg starts to add up very fast.

Talk to most brewers, and the general attitude is “a keg’s a keg.” But those peddling German-made steel would beg to differ. In the aisles of the Craft Brewers Conference exhibit hall this year, a turf war festered. Tensions (and sales bravado) flared as the spread of cheaper, Chinese goods put pressure on the dominance of heritage brands.

Some folks even got a little petty in their competition lust. The addition of chromium to normal steel renders that stainless non-magnetic (much to the chagrin of homeowners with snazzy new stainless steel appliances). Knowing this, and seriously questioning the purity of the Chinese kegs on display at CBC 2016 in Philadelphia, reps from a few keg rental companies walked along the displays with a large magnet. Each heavy thunk of the magnet sticking to the sides of the kegs resonated through exhibit hall like a klaxon warning of bad quality.

Brian Woltkamp, a Sales Manager for BLEFA who sells Franke brand German kegs, compared the kegs to cars. “Sure, you can buy a Hyundai, but you can also buy a Mercedes,” he said, waving his hands over his admittedly very impressive lineup of products. The visual difference was dramatic. Where the Jinfu kegs looked dull and unadorned, the Franke kegs looked polished, embossed, highly professional. But they were also an intentionally-undisclosed amount more expensive.

The additional price is justified by better technology (burst discs, QR code tracking, lot numbers for easy QA and recalls if necessary), but also by pedigree. If Chinese-made goods carry a subconscious stigma of being lower-quality, German-made goods carry the exact opposite. That reputation obviously means something, because the list of BLEFA partners isn’t short or unimpressive, with Boulevard and Ommegang logos featured proudly next to the Franke logos on the CBC display. Several counterfeit German kegs (typically made with Korean or Chinese steel) have also appeared on the market, missing proper stamping and markings, even having the name of the brand misspelled due either to incompetence or legal dodging.

Woltkamp, stroking his red beard and smiling, is clearly proud of his product. “We’ve got the reputation for quality and most people in the industry know it.”

There are other options for the soon-to-be keg owner, too, like the relatively new American Keg based out of Pottstown, Pennsylvania. Oddly enough, they’re the only company making stainless steel beer kegs in the U.S. But despite a standalone facility, they can’t keep up with demand. As a result, they’ve imported some Chinese kegs.

“We want to produce all our kegs domestically, but we’re not quite there yet,” says Paul Czachor, CEO. “I only work with reputable importers, and have tested the kegs that came to me before selling them. I’m committed to sending out a keg to commerce that’s 100% safe.”

He then lowers his voice a little bit and leans in: “Some of the ones I’ve received didn’t pass the tests. The steel was crap. And I said to myself, ‘What the hell?’”

His production manager, Kellby Ochs, explains why the “a keg’s a keg” rhetoric is flawed to anyone who has ever fired up a welding torch.

“Welding is as important as the quality of the steel,” he notes, running his hand along the weld that goes between the chime and the body of the keg. “The best weld is a TIG weld on the inside and out, with the layers overlapping to create a strong union. A lot of the Chinese kegs have a single-contact weld. It’s much weaker and, over time, especially with weight in the keg, could break.”

A traditional half-keg of beer holds 15.5 gallons. A gallon of beer weighs roughly eight pounds, and the keg itself weighs about 20. All told, that’s around 150 pounds of potential weight that could drop onto a brewery or retail worker if a chime snapped off. The danger speaks for itself.

Ochs goes on to describe some other pretty gross what-ifs:

“Porous welds are a problem. If the weld is bad, or bad flux is used, it leaves tiny holes where anything can get in.”

Such areas could potentially escape even the most robust keg washer, which means contaminated, foul-tasting beer. Lots of people are aware that dirty lines can ruin an otherwise well-brewed product, but can now add the keg to the list of potential carriers of off-flavors and defects.

On the flip side, CBC vendors who were more than happy to wax chemical about the wonders of their products, suddenly went quiet or clueless when asked where their steel was sourced from. Some claimed ignorance, or offered vague European regions that the steel may have originally hailed from. Others, confident and proud, announced their steel was only the best Norwegian or American 304. A few even offered a defensive “I don’t know” response to the question, clearly perturbed that anyone would dare dig that deep.

As I talked with more folks, anecdotes started to slip. They came out casually, creeping in as asides to a main point, as to not draw too much attention to themselves. A BLEFA rep told me the story of Silversmith Brewing in Niagara, Ontario, who bought a Chinese stainless brew system with so many faulty fittings it delayed their opening several months.

John Laffler of Off Color Brewing purchased a fermenter from a Chinese vendor, but didn’t bother to test it with water, as it had come with a certificate claiming it had been pressure tested. When filled with the first batch, the door leaked beer all over the floor. In response, the vendor suggested using old compact discs to fill the gap between the gasket and the steel, something Laffler admits “is an old brewer’s trick, but not the kind of thing you want to hear when you just spent money on a brand-new fermenter.”

Chris Wright of Pike’s Peak Brewing in Colorado offered a story that was almost a piece of standalone comedy. “After weeks of not receiving my order, and many long-distance phone calls, they tried to sell me a story that the container holding my brew tanks had fallen off the ship,” he says, “and was lying at the bottom of the Pacific Ocean.”

The stories presented as absurd half-truths and urban legends that no one really wanted to admit were real. But nearly everyone had one—or knew someone who did. The curse of buying “cheap” steel courses through the veins of the entire industry, a systemic problem that seemingly no one wants to take seriously, perhaps out of embarrassment or, worse, legal repercussions.

And there, stage Shanghai, enters the irony of cheaping out on steel. The entire ethos of American “craft” beer is one of quality and artistry, from ingredients to finished product. Breweries meticulously create their ideal beer to exact recipe specifications—why would they then dump it into whatever vessel is the least expensive?

Not all steel is created equal. It’s graded based on the purity and balance of its constituent elements. Beer, being acidic, needs at least SAE 304 steel—that kind that contains 17.5–20% chromium, 8–11% nickel, and less than 0.08% carbon. This easily malleable grade of stainless not only prevents the low pH of beer from corroding or leeching, but also bends easily into the cylinders and cones that are preferable for brewing applications. It’s a standard across the U.S. and Europe, and compliance groups regularly test it to make sure it’s up to snuff.

But that’s not necessarily true about China. They do have standards, ones that many companies like Major Keg are proud to brag about, even showing low resolution copies of their certifications in the materials they hand out to potential customers. But they don’t seem to be consistently enforced, and it’s difficult to tell who’s adhering to what once the deal has been struck.

“The Chinese are masters of sub-contracting,” says Jeff Erway, owner of La Cumbre Brewing Co. in Albuquerque, NM. And he should know. Erway’s had a number of issues with Chinese-made brewery equipment, and speaks from experience when he says, “once they’ve made a deal, they sub it out to someone else, and it’s difficult to trace who makes what.” Some of his concerns are legal and financial, too. “So many of these companies lack ethics,” he says. “You really have to work directly with a vendor based in the U.S. so there’s some accountability and a paper trail.”

“Unlike the U.S., [China] is a place where lawyers don’t rule everything,” he continues. “But price drives a lot. With German and Italian steel, you pay through the teeth, but at least you know what you’re getting.”

European manufacturers use infrared and x-ray as part of their quality checks to determine the thickness and composition of the steel, something most Chinese manufacturers cannot claim. Erway admits he sees the allure.

“These tanks are two thirds or three fourths cheaper than pretty much all the competition,” he says, quickly adding, “but if you hear somebody say they’re gonna give you something for free, it’s time to turn around. You’ll pay for it eventually, even if you save up front.”

His other concerns are safety-related. “I’ve seen enough Chinese threads to know threaded kegs are a risk,” he says. “We haven’t heard of any Chinese kegs exploding…yet.”

It’s easy to forget, on the other side of the pint glass, that brewing is an industrial job. Safety concerns are paramount, and pressurized kegs—especially when cleaning—pose a real threat to workers across the industry.

It’s not all idle fearmongering, either. In April 2012, Redhook Ale Brewery employee Benjamin Harris was killed when a plastic keg’s safety mechanism failed, and it exploded during routine cleaning. A lawsuit is still pending regarding his wrongful death. Erway says he’s seen plastic kegs explode in his brewery as well—thankfully without injuries.

Poorly manufactured products or un-recalled defects can have disastrous consequences, and as Erway notes, those consequences can reverberate: “one accident could do damage to the entire industry.” Especially scary are unsubstantiated claims of safety. A representative from the Paul Mueller Company—who creates some of the largest American-made brewing equipment for breweries like Green Flash—tells GBH he’s seen completely spoofed certifications for internationally originating steel that “looked like they were made in Photoshop.”

“There’s little accountability coming out of China, and some of the steel I’ve seen and heard about is disgustingly unacceptable,” Erway says.

He’s specifically referring to one importer who sent over brewing vessels with an interior of 304 steel and an exterior of only 200 grade, with a chrome plating to make it look like 304. Not only is chrome plating applied using chromic acid, which contains the extremely carcinogenic Hexavalent Chromium, it pits very easily when exposed to caustic cleaning agents, and “the tanks were also absolutely ruined after 10 or so uses.” That’s a ton of lost capital for the brewery involved, with nearly no legal ramifications, as vendors without some domestic representation are impossible to track down or hold liable.

To that end, more reputable Chinese steel producers like Jinfu have begun establishing “reseller” companies that sell their goods under different names. One such company, Crusader Kegs & Casks LTD, works out of Rushden, England, and was on site at CBC 2017. At quick glance, one would have no idea they weren’t selling British kegs. The capital U in the name is a St. George’s flag kite shield, and the reverse side of their business cards have a sword-wielding, armor-clad Templar, almost like they’re trying really, really hard to ensure they look as “British” as possible.

But dig a little deeper, and all the kegs they sell come from Chinese factories. While a touch duplicitous, Crusader representative Justin Raines explains it rather simply: “lots of UK breweries want to work with a local company with a local phone number, who speak English.”

He also stresses his company’s transparency: “We never pretend like the kegs aren’t Chinese.”

When asked why people work with Chinese steel manufacturers, Raines provides another simple answer: “price is driving Jinfu’s growth.” He adds that they do offer a 10-year warranty (compared to 30-year warranties on BLEFA or Schaffer German kegs), plus as many stress, strength, and safety test certifications as someone could ask for. “They’re also owned by the Chinese government, which helps keep costs low,” he adds, showing off a binder of what had to be more than 100 different quality and safety certification documents, just to hammer his point home.

The history proves fascinating, too. As noted earlier, Jinfu and its biggest competitor in China, Major Keg, were producing relatively few kegs, casks, and other stainless steel products before 2005.

“When these companies first started, the products were rough,” Crusader’s Raines says. “China is great at copying things. They’d walk through a factory of an unpatented product, then go back and try to recreate it themselves. Eventually, they got it right, and now they can sell it at a lower price point.”

The concern isn’t with the steel that’s already in the market. Most functioning breweries already have established relationships with vendors for their brewhouse steel and kegs, and others have enough hands-on experience and understanding of the industry to know better than make sketchy overseas deals. But many of the new, fresh-faced start-up brewers at CBC seemed swayed by the siren’s call of savings. Of eight new brewers GBH spoke to, seven were there specifically to look at Chinese brewing equipment because it was so much cheaper and they were on relatively tight budgets.

The experience of Pike’s Peak’s Wright should act as a warning to all those. “Don’t get me wrong. Saying that all Chinese steel is bad, isn’t fair. As with any country, there’s good and bad. Good steel has come from China through U.S. companies.”

The highest quality steel gets imported by U.S. companies who use their own backend staff and resources to go into China and find a dedicated plant. They typically do all the legwork to inspect the craftsmanship, check the welds, and ensure standards of raw steel have been met.

“I thought if they did that, why can’t I, and go directly to China?” Wright says. “I ordered two 30-barrel fermenters and one 30-barrel bright tank for $30,000. I went directly to them, checked it out, sent them a deposit. I got a call saying my order was in process, but there were some of the exact same tanks about to arrive.”

He almost chuckles at himself, retelling the story, “I figured hey, save on the shipping.”

“I was a little bit naïve. I sent complete payment to them directly,” he half-laughs again. “But they had already sold them to another company. They tried to change the paperwork in customs to my name, but it didn’t work. I needed the capacity, so I called the vendor again. Ended up buying those tanks twice. Eight months after my original payment, I just told them to send me anything, just so I could brew, so they sent me three 10-barrel tanks, which wasn’t even near what I originally ordered.”

The general hope is that time will improve Chinese steel’s standards, or that competitors will win more business by sheer reputation and dropping prices to compete. Until then?

“What I learned, is if you go direct to China, or any overseas company, set up an escrow account,” Wright advises. “It’s really easy to get overwhelmed by cheap.”